Filed by FCNB Corp
Pursuant to Rule 425 under the
Securities Act of 1933
Commission File No.: 000-15645
Subject Company: FCNB Corp
NEWS RELEASE
FOR IMMEDIATE RELEASE Contact: Mark A. Severson, SVP/CFO
October 10, 2000 (301) 624-2301
FCNB CORP REPORTS HIGHER EARNINGS FOR THIRD QUARTER, FIRST NINE MONTHS OF 2000
ASSETS GROW 10% TO $1.61 BILLION
[Frederick, Maryland] - FCNB Corp (FCNB:NASDAQ-NMS) reported third quarter core
earnings of $4.17 million, or $0.35 per basic share, which yielded a 24.2%
increase over results for the same period last year. For the first nine months
of the year, core earnings of $11.21 million, or $0.94 per basic share,
increased 12.7% year-over-year. Reported earnings of $4.16 million for the
quarter, or $0.35 per basic share, and $11.17 million for the first nine months,
or $0.94 per basic share, were impacted by $21,000 and $64,000 in one-time
merger-related expenses, respectively. For the third quarter, reported earnings
increased 594.8%, while reported first nine months results improved 60.25%. FCNB
Corp's return on average equity before merger-related expenses improved to 17.2%
in the first nine months of 2000 from 13.9% last year. At the end of the third
quarter, total assets stood at $1.61 billion, and marked a 9.8% year-over-year
increase. "Our earnings and asset growth were accented by continued solid loan
growth in the third quarter," stated A. Patrick Linton, President and CEO of
FCNB Corp. Results were also bolstered by gains in noninterest income, led by
insurance revenues that grew by nearly 12% for the first nine months.
Noninterest income represents 28% of net revenues, a measure significantly
better than that for a peer group of comparable banks. Additionally, the Board
of Directors declared a quarterly cash dividend of $0.16 per share, payable
November 3, 2000 to shareholders of record on October 20, 2000.
The most significant event in the third quarter was the July announcement of
FCNB Corp's agreement to merge with BB&T Corporation, based in Winston-Salem,
North Carolina. Subject to shareholder approval at a meeting of shareholders and
other conditions, FCNB Corp shareholders will receive 0.725 shares of BB&T Corp.
common stock for every one share of FCNB Corp common stock owned, in a tax-free
exchange. The actual dollar value to be received by FCNB shareholders fluctuates
daily with changes in BB&T's stock price. What will not change is the number of
BB&T shares to be received for each share of FCNB stock. Until the merger is
completed, FCNB common stock will continue to trade on the NASDAQ National
Market under the symbol "FCNB." After completion of the merger, shares will be
converted into BB&T common stock. To determine the value of FCNB Corp's stock on
any given day, assuming completion of the merger, multiply the per share price
of BB&T's stock (the stock trades on the New York Stock Exchange under the
ticker symbol BBT) by 0.725. FCNB Corp anticipates holding a special meeting of
shareholders to consider this merger in mid-December 2000, and merger closing is
expected in January 2001.
FCNB Corp believes BB&T, which has $55 billion in assets and operates through
over 800 banking offices in the Mid-Atlantic and Southeast, is a high-quality
institution. "We anticipate a smooth transition, and FCNB Bank customers will
soon be introduced to BB&T's strong branch-based sales culture and new products
and services such as capital markets access, expanded cash management, leasing,
and international banking," said Mr. Linton.
<PAGE>
"We chose to partner with BB&T Corp. based on their firm commitment to community
banking and delivering superior customer service and products," said Mr. Linton.
BB&T Corp.'s community banking strategy allows local bankers to make their own
decisions. Currently, BB&T has 22 autonomous regions, each with its own
president. After completion of the merger, Frederick will become a regional
office of BB&T, and Mr. Linton will continue to serve customers as the Regional
President of BB&T's new Frederick region.
FCNB Bank, FCNB Corp's financial services franchise, has 33 full-service offices
in Frederick, Montgomery, Howard, Carroll, Baltimore, Anne Arundel, and Prince
George's Counties of Maryland, Washington, DC, and Fairfax County, Virginia.
Through its Frederick Underwriters, Inc. subsidiary, the company offers a full
range of property, causality, and personal insurance products. FCNB Bank is a
member FDIC and an Equal Housing Lender.
This press release contains forward-looking statements as defined by federal
securities laws. These statements may address issues that involve significant
risks, uncertainties, estimates, and assumptions made by management. Actual
results could differ materially from current projections.
Please refer to FCNB's filings with the Securities and Exchange Commission for a
summary of important factors that could affect FCNB's forward-looking
statements. FCNB undertakes no obligation to revise these statements following
the date of this press release.
FCNB urges shareholders and investors to read the proxy statement/prospectus and
other documents that will be sent to shareholders in connection with the special
meeting after it is finalized, and which will be filed with the SEC by BB&T in
connection with the proposed merger, because it will contain important
information about BB&T, FCNB, the merger, and related matters. The final proxy
statement/prospectus, when available, which will be included in BB&T's
registration statement on Form S-4, and other relevant documents filed by FCNB
or BB&T in connection with the merger, will be available for free, both on the
SEC's web site (http://www.sec.gov) and from FCNB and BB&T as follows:
Shareholder Relations Shareholder Relations
FCNB Corp BB&T Corporation
7200 FCNB Court Post Office Box 1290
Frederick, MD 21703 Winston-Salem, NC 27102
(301) 662-2191 (336) 733-3021
FCNB Corp and its directors, executive officers and employees may be soliciting
proxies from shareholders in favor of the merger. Collectively, FCNB's directors
and executive officers own approximately 13% of the outstanding shares of FCNB
common stock as of July 31, 2000. Additional information regarding the interests
of such persons in the merger, as shareholders and otherwise, can be obtained
from the final proxy statement/prospectus when it becomes available, and from
FCNB's proxy statement for the annual meeting of shareholders held on April 18,
2000.
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Investment products are not FDIC insured, may lose value, and there are no bank
guarantees.
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<PAGE>
FCNB CORP AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in thousands)
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
ASSETS 2000 1999 1999
<S> <C> <C> <C>
Cash and due from banks 32,910 32,601 39,323
Interest-bearing deposits in other banks 740 4,045 28,737
Federal funds sold 36,264 26,042 8,317
Cash and cash equivalents 69,914 62,688 76,377
Loans held for sale 704 3,159 878
Investment securities held to maturity 18,376 21,768 21,263
Investment securities available for sale-at fair value 429,693 416,251 420,879
Loans - net of unearned income 997,229 874,475 903,072
Less: Allowance for credit losses (9,178) (9,648) (10,043)
Net loans 988,051 864,827 893,029
Bank premises and equipment 25,244 25,975 25,543
Other assets 74,886 68,583 67,827
Total assets 1,606,868 1,463,251 1,505,796
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Deposits:
Noninterest-bearing deposits 179,602 158,069 163,581
Interest-bearing deposits 899,348 845,734 865,278
Total deposits 1,078,950 1,003,803 1,028,859
Short-term borrowings:
Federal funds purchased and securities sold under
agreements to repurchase 67,814 60,958 59,995
Other short-term borrowings 310,507 252,270 269,268
Long term debt:
Guaranteed preferred beneficial interests in the
Company's subordinated debentures 40,250 40,250 40,250
Accrued interest and other liabilities 15,249 14,551 17,659
Total liabilities 1,512,770 1,371,832 1,416,031
SHAREHOLDERS' EQUITY
Common stock 11,924 11,904 11,924
Capital surplus 54,416 52,064 54,316
Retained earnings 38,004 33,011 32,581
Accumulated other comprehensive income (10,246) (5,560) (9,056)
Total shareholders' equity 94,098 91,419 89,765
Total liabilities and shareholders' equity 1,606,868 1,463,251 1,505,796
</TABLE>
<PAGE>
FCNB CORP AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(Dollars in thousands, except per share amounts)
<TABLE>
<CAPTION>
For 3 months ended For 9 months ended
September 30, September 30,
2000 1999 2000 1999
<S> <C> <C> <C> <C>
Interest income:
Interest and fees on loans $ 22,338 $ 18,898 $ 63,121 $ 55,329
Interest and dividends on investment securities:
Taxable 6,996 6,288 20,573 19,005
Tax exempt 130 131 390 421
Dividends 467 378 1,331 1,145
Interest on federal funds sold 267 299 870 647
Other interest income 10 42 124 131
Total interest income 30,208 26,036 86,409 76,678
Interest expense:
Interest on deposits 10,763 8,686 29,934 25,187
Interest on federal funds purchased and
securities sold under agreements to repurchase 1,075 892 2,832 2,301
Interest on other short-term borrowings 4,873 3,284 13,140 9,650
Interest on long term debt 844 844 2,533 2,533
Total interest expense 17,555 13,706 48,439 39,671
Net interest income 12,653 12,330 37,970 37,007
Provision for credit losses:
Operating activities 450 390 1,400 1,278
Merger-related -- 2,900 -- 2,900
Total provision for credit losses 450 3,290 1,400 4,178
Net interest income after provision for credit losses 12,203 9,040 36,570 32,829
Noninterest income:
Service fees 1,546 1,369 4,482 3,971
Insurance commissions 1,727 1,564 4,977 4,457
Net securities gains 523 159 855 805
Gain on sale of loans 39 343 132 832
Income from bank-owned life insurance 413 393 1,206 1,164
Other operating income 1,151 1,079 3,243 2,823
Total noninterest income 5,399 4,907 14,895 14,052
Noninterest expenses:
Salaries and employee benefits 6,387 6,405 19,643 19,246
Occupancy expenses 1,456 1,523 4,234 4,348
Equipment expenses 1,047 985 3,182 3,002
Merger-related expenses 21 1,516 64 1,688
Other operating expenses 2,605 2,860 7,980 8,371
Total noninterest expenses 11,516 13,289 35,103 36,655
Income before provision for income taxes 6,086 658 16,362 10,226
Provision for income taxes 1,931 60 5,194 3,257
Net income $ 4,155 $ 598 $ 11,168 $ 6,969
Net income - before merger-related expenses $ 4,168 $ 3,355 $ 11,207 $ 9,943
Basic earnings per share $ 0.35 $ 0.06 $ 0.94 $ 0.60
Diluted earnings per share $ 0.35 $ 0.05 $ 0.93 $ 0.58
Basic earnings per share - before merger related expenses $ 0.35 $ 0.28 $ 0.94 $ 0.85
Diluted earnings per share - before merger related expenses $ 0.35 $ 0.28 $ 0.94 $ 0.83
Basic weighted average number of shares outstanding 11,924,443 11,752,285 11,924,492 11,655,706
Diluted weighted average number of shares outstanding 11,981,393 11,937,239 11,960,604 11,915,845
</TABLE>
